HSBC cuts bonus pool by US$600 million as bank focuses on costs, bad loans
- Bonus cuts come despite 55 per cent jump in revenue in global markets business in second quarter
- HSBC warned this week it may have to set aside up to US$13 billion for bad loans this year
HSBC cut its bonus pool by US$600 million in the first half of the year as chief executive Noel Quinn slashed costs as part of a massive restructuring of the lender and as the bank prepared for a potential surge in bad loans due to the coronavirus pandemic.
The bonus pool shrank despite a 55 per cent jump in revenue in the bank's global markets business during the second quarter as the coronavirus pandemic created a volatile trading environment. The bank’s fixed-income operations were a stand-out in the quarter, with a 79 per cent jump in revenue.
“In the second half of this year, on the profitability side, we don’t expect global markets to repeat their first-half performance of just over $4 billion [in revenue],” Ewen Stevenson, the bank’s chief financial officer, said during the bank’s first-half results presentation this week. “They made $2.6 billion in the second half of last year, and also we’ve got the UK bank levy [in the second half of the year].”
02:05
HSBC sees second-quarter profits plunge by 82 per cent thanks to coronavirus
HSBC declined to comment on the bonus pool cut on Thursday.
To be sure, bonuses are not traditionally paid until after the year ends, and the amount of the bonus pool could fluctuate over the course of the year.